Taylor Swift is taking Europe by storm, with her highly anticipated tour drawing massive crowds and prompting some pundits to predict a substantial economic boost. Fans are flocking to dozens of sold-out shows from Dublin to Vienna and beyond, creating a wave of excitement across the continent.
Optimism abounds that Swift’s tour, alongside major events like the Olympic Games in France and the Euro 2024 soccer championship in Germany, will provide much-needed economic stimulation for Europe. The continent has teetered on the brink of recession over the past two years and has struggled to keep pace with the economic performance of the United States.
However, there is a significant caveat to this hopeful scenario: “Swiftonomics” is not a real phenomenon. While Swift’s tour is undeniably a cultural milestone, the long-term economic benefits are negligible. The excitement generated by her concerts is fleeting, and any economic uplift is difficult to discern once the buzz dies down.
Stockholm serves as a prime example. In May, nearly 180,000 fans attended Swift’s three shows, with half of them traveling from abroad. This influx of visitors generated approximately 850 million crowns ($81 million) in revenue for the city. While this is an impressive figure for a single weekend, it represents a mere drop in the bucket for Sweden’s economy, which boasts an annual output of $623 billion and ranks eighth in the European Union.
“This extra turnover is a great weekend boost for Stockholm and, in particular, its tourism sector,” says Carl Bergkvist, Chief Economist at the Stockholm Chamber of Commerce. “But it’s just that — a weekend, with no visible or significant impact on overall economic growth.” Hotels and restaurants experienced a windfall, and even sales of cowboy hats surged by 155%, according to the Chamber’s estimates.
The impact on prices is similarly imperceptible and may even be smaller than when Beyoncé performed in the city a year earlier, temporarily fueling inflation concerns. Despite the so-called “Beyoncé effect,” Swedish inflation has since declined from 10% to just over 2%.
“Is there a Taylor Swift effect? It’s extremely small and temporary, at best,” says Carsten Brzeski, an economist with ING. “There is copious research in the run-up to big events outlining the economic benefits, but after the fact, you need a magnifying glass to find these so-called benefits in the numbers.”
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This assessment holds true for other major events like the Olympics and Euro 2024. While they provide a boon for restaurants, beer sales, and merchandise vendors, they do not have a lasting impact on consumption patterns.
“The consumer spending that occurs is expenditure that would happen anyway and tends to be a form of substitution,” explains Professor Simon Shibli at Sheffield Hallam University.
Danske Bank’s tongue-in-cheek “draft beer index” illustrates this point. During the previous European Championship, Denmark experienced a 106% increase in pub and restaurant receipts when playing against England, compared to usual levels.
“On a micro level, such events do provide a boost, but even that is small and temporary,” says Piet Haines Christiansen of Danske Bank. “They are relevant for specific sectors, like hotels and catering when Taylor Swift visits, or beer sales in countries with football matches.”
Recent media reports have seized on Barclays’ research, suggesting that Swift’s concerts could inject one billion pounds sterling into the UK economy. However, this estimate overlooks the substitution effect on other spending and the fact that much of the income from Swift’s tour will ultimately flow back to the United States, dampening any local economic benefit.
For economies as large as the UK or those in continental Europe, these financial transfers are insignificant on a macroeconomic scale. The 20-country euro zone, for example, had a trade surplus of 39 billion euros in April alone, making the economic impact of even highly popular events like Swift’s tour minuscule in comparison.
